Inheritance tax reforms uncorked: what they mean for English winemakers
As part of our series of blogs for English Wine Week, we are revisiting the upcoming changes to Business Property Relief for Inheritance Tax (IHT), which will have big implications for some vineyards and wine makers.
What are the current rules?
At present, Business Property Relief gives 100% relief from Inheritance Tax (IHT), for qualifying business assets, with no upper limit. This means that no IHT is payable on business assets held on death, regardless of their value.
Business owners have relied on this relief to allow their businesses to be passed on tax free, making it tax efficient to keep ownership of the business until death. In addition, assets that are inherited receive a capital gains uplift, avoiding any Capital Gains Tax on the increase in value.
What is changing?
From 6th April 2026, the 100% relief will be limited to £1m, with only 50% relief above that, this means that the value of business assets above £1m will suffer IHT at 20%. For example, a vineyard with a value of £3m would face an IHT bill of £400,000.
This is a dramatic change for many businesses, whose plans were based on the previous tax relief. As a result, many business owners are being forced to consider alternative plans.
What can be done?
It is important to have a clear understanding of how the changes will affect you. You should consider your existing plans and the assessing the value of your estate, this might mean reviewing wills and estate planning to assess the full impact.
Making transfers of assets during your lifetime can reduce the value of your estate, and so minimise the IHT payable. However, other taxes may be payable as a result of transfers, so it is crucial to ensure that all aspects have been considered.
Other options may offer benefits with less disruption, such as investing in life cover which can provide your estate with funds to settle the IHT.
How can Carpenter Box Help?
Early planning is key to minimising your estate’s IHT liability and passing on the maximum to the next generation. While the changes are coming into effect from 6th April 2026, some actions may need to be taken before then, particularly where trusts are being used.
Our tax specialists can help you arrange your affairs and understand what options are available to you, please do not hesitate to contact us for more information.
